Funding Ideas/Need private lending/Ideas?

Question

Hi everyone! I currently have 1 single family LTR (in Maryland) under my belt under a DSCR loan due to my high debt/income ratio. I am looking to acquire 2nd property but at the moment can only qualify for a DSCR loan.  I am saving up for another down payment but this is taking forever due to my high expenses at home. The lenders I found for now want atleast 25% down and 12-36 months of reserves. (Houses I am looking at cost up to $200k)  I have considered Subject to but it is hard to do when I invest only out of state at the moment. My home market, (NYC) is unaffordable to invest in for me at the time.  Any suggestions out there on ways to create more funding, when friends,family do not want to contribute, and home living expenses are slowing you down. (My wife is not onboard with any of this, and would be easier if she was.) So I am a bit out of ideas.

Dominic Pizzi · Answer

Hey Leonard! Send me a PM, might be able to help you on this with some more info from you!

River Sava · Answer

Hi Leonard - I would love to connect and discuss using another DSCR loan for your second investment. I have seen 20% down and would love to help you out!

Leonard Rybak · Answer

Thank you @Frank Avallone II and @Stephanie P. and @Chris Seveney for your help. I will try looking into increasing my income, or lowering my debt

Frank Avallone II · Answer

Hi @Leonard Rybak, I would advise trying to fix the underlying problem first which seems to be your debt to income ratio. See if you could start to earn more with entertaining another job. At the same time start trying to eliminate any bad debt you have. Doing this is going to make the process much easier moving forward. Not to say that DSCR loans are a bad option but doing what I mentioned is going to help regardless. I know we typically can do DSCR loans at 20% down if that helps. We also typically require only 3-6 months of reserves depending on the scenario.

Stephanie P. · Answer

I don't have any lenders with reserve requirements that are that high.

PM sent.

Chris Seveney · Answer

I recommend getting your home expenses in order. Your risk  profile is to high, and realize that if something happens to your current rental etc. then you will be set back for years on future purchases unless you find sub2 or owner financing, but you would be removing yourself from 95%+ of the opportunities that will be coming down the pipe.